The untold story of ageism in India Inc

The engineer quietly left. “It has happened before," he says matter-of-factly. “Since the beginning of this year, in at least 4-5 interviews, I have been told that at 55, I am too old for senior roles. Many companies only look for candidates in their late 40s or have someone homegrown for senior roles," he says.

A mechanical engineer by training, the resident of Bengaluru has a Master’s degree in tool engineering from a government college. With 30 years of experience in the auto and manufacturing sector behind him, his CV is not one to be easily written off.

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But the pandemic changed everything. He held the post of senior executive in the manufacturing and engineering department in an auto engineering firm just before covid struck. When the auto sector opened up after the first lockdown, employees were expected back in office and on the factory floors. At his age, he was reluctant to visit factories at the height of the pandemic. He resigned.

Since the beginning of this year, he has been hunting for a job – to no avail. “They (companies) have a trust issue. They assume those in the 50s can’t be trusted with change management," he says.

The former executive’s experience is just one instance of the unacknowledged ageism that is spreading in India Inc. Even if they have several years of work ahead of them, workers above the age of 50 are facing rejection and career stagnation as companies prioritize a younger, more “agile" workforce, who can adapt to swift changes in technology. Only a tiny minority that has raced ahead to the CXO levels is immune to such changes. The result is a steady increase of a younger workforce in the middle and senior management and a fading out of the ‘older’ talent pool.

“There is a natural preference for organizations to have younger staff. It’s a combination of a belief that younger people are more agile in their thinking or have greater energy and a financial imperative —younger people are at an aggregate level paid lower than their older counterparts. We often hear senior-level job criteria being defined as ‘preferring people in their early to mid-40s’," says Anandorup Ghose, partner, Deloitte India.

Ghose acknowledges that although the 50-plus segment brings in “significant experience and expertise in their jobs", there is a fear that some of their “core skills may have become somewhat obsolete". And this fear is, more or less, sector-agnostic.

Old is not gold

Between 2017 and 2021, the services sector has seen a sharp decline in the proportion of 50-plus workers (from 9% to 1%) and in the 28-50 age bracket (80% to 63%), according to an analysis by consulting firm Aon India of hiring trends in 150 companies, done exclusively for Mint. Simultaneously, the proportion of workers aged 21-28 has shot up three-fold.

In contrast, the proportion of 50-plus employees in the manufacturing sector has declined marginally. “The share of younger population is more concentrated in the services sector, while the manufacturing sector still sees a lot of demand for the experience and maturity of relatively older employees," says Roopank Chaudhary, partner, human capital solutions, Aon.

That’s also true of the banking, financial services and insurance sector. “Given the massive regulations involved in this space as well the need to have greater experience and vintage in risk and control functions, financial services see a higher demand for 50-plus workers," Chaudhary added.

Worldwide, too, the bias against age is a palpable one. According to a global study done in 2021 by Generation, an independent non-profit founded by McKinsey, a large part of the sifting happens at the hiring stage where recruiters “strongly favour younger job candidates over age 45+ individuals". The study highlighted that according to the hiring managers surveyed, the younger group greatly outperforms the age 45+ cohort in every area of evaluation. “Asked to rate candidate strengths, employers overwhelmingly say younger candidates are more job-ready, have more relevant experience, and are a better fit with company culture," the report pointed out.

In India, the technology industry, which has always attracted and preferred a younger workforce, has also seen a three-fold jump in the 21-28 age bracket of workers, and a sharp decline in the 28-50 age category, according to Aon’s analysis. The 50-plus population, always low, has fallen further to just around 0.4%.

The bias is so strong in startups that recruitment firms say that age often trumps the right profile. A few months ago, a global recruitment firm was given the mandate to hire a chief financial officer (CFO) for a tech-based startup. The company was based out of Mumbai and the hiring team could not believe their luck when a CFO from one of the large internet firms decided to accept the role. He was keen to work in a startup and among young techies.

The founders cleared him. He went through two rounds of interviews and was willing to relocate to Mumbai for the role. The last round with investors was supposed to be the final one. After the interview, the investors called the promoters and the recruiter and asked about the candidate’s age. He was 52 years old with 25 years of work experience. “I was told that the startup needs someone in their late 40s at the most, because investors do not want to lay their bet on a 50-plus CFO. I had to make up some excuse on culture fit to the candidate, who was extremely disappointed," says the recruiter, who did not want to be named.

The hit becomes brutal when middle managers are on the wrong side of 40 but have not managed to reach senior roles. A hiring manager in a manufacturing company rejected a senior managerial candidate who was 45. “There would not have been any space to grow in the company given the 13 years he had left in service. The appropriate age for a senior manager right now in the company should be in the 30s," the hiring manager said on grounds of anonymity.

Post-covid, the memo to recruiters across the board is the need for a young and fresh outlook at work. “We have been told that all roles need younger talent. Companies are going through a rebranding exercise after two years of the pandemic and they want a younger workforce even for their back office and managerial middle management roles," says a senior HR executive in one of the largest retail chains in India.

Breaking through

For those with experience and expertise, the challenge is to keep up with the times. In the 1990s, Ujjwal Thakar was in his 40s and an executive with Standard Chartered Bank, when he realized the need to stay relevant. He went on to set up a bank for the Times Group, and now, at the age of 71, works as a co-founder in his own consulting company.

“There is value for experience and network. But at what price point you will be able to encash that is tricky. You have to be contemporary, reinvent yourself. I did this by working with younger team members to stay relevant. I learnt new-age skills from that," Thakar says.

He admits that ageism is an open secret in hiring practices. ‘There have been times when I have been looked over because of age. No one tells you directly, but you know when you have been skipped over," he says. Thakar says a preference for age in roles like sales is understandable because energy is at a premium. But for other profiles, age should not be a criterion.

The Bengaluru executive cited earlier points out that most companies do not have any succession plans in place. “And so, they do not know what to do with people like me," he says.

Typically, succession plans assess the potential of the workforce and map them with the growth plan of the company. In most cases, that highlights the need for employees to be upskilled and for companies to invest in them to make employees future-ready.

But in most companies, the budgets to train senior talent are non-existent. The retirement age in companies varies from 58 to 65 years and some of the conglomerates often give extensions. But the focus on upskilling is only meant for the top management bracket.

“There is an absence of anti-ageism laws in India unlike in west. Here, age is often quoted as a criterion by hiring managers. It is frowned upon in a lot of countries in west," says Pranshu Upadhyay, regional director for search firm Michael Page.

Upadhyay recounted the incident of a renowned FMCG company which was looking for a chief executive officer (CEO). The preference was for someone with lesser experience but went with a candidate who was 53. In merely two years, the CEO has transformed the company completely by digitization and by hiring tech-savvy CXOs while lending his experience and track record to flawless execution.

The regional director notes that promoter-driven firms are more flexible compared to the tech and startups in their demand for managers. “Promoter-driven firms and businesses in the fields of textile, cement and building material see good acceptance of candidates above 50 years," says Upadhyay.

While companies prioritize balance sheets and technology in rejecting 50+ candidates, the crisis for the older workforce is acute. Not only are Indians living longer, but the double effect of inflation and lower interest rates are chipping away at incomes.

“Unlike in the West, Indian companies in the private sector don’t have the drag on their balance sheets with pension provision. While this is a good thing at a macro level, again at an individual level this becomes a problem as for most of this older generation (those that haven’t reached senior management jobs), the post-retirement incomes are a miniscule percentage of their compensation when they were working. Compounded with a broader decline in interest rates and greater longevity, it becomes a more pressing problem," Ghose of Deloitte says.

As of Monday, the Bengaluru engineer said while his resume is floating with recruitment firms, he is resigned to the fact that it may be a long time before he gets a call for a job. He has a buffer of financial resources to keep him away from panic. “I do not need money; I want to work because I am nowhere close to retirement. I spend time pursuing my interests in music. I have told recruiters that if there are companies who want to launch products, I can be the right person because that requires 2-3 years of work and I can do that very well. They are yet to get back," he says.

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